More than at any time since 1998, the last year has seen the IMF and World Bank in the dock. In one sense the crisis has given them a new lease of life, a new relevance. As the crisis has unfolded, the IMF has been given greater funds to cope with an expected spike in demand. It has worked hard to shed the traditional stigma attached to IMF aid, and created new support packages – acknowledging that, with aid as with so much else, one size often does not fit all. That is the case for the defence. The prosecution’s case hinges on the speed – or...Read more
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The global financial crisis required decisive thinking from regulators, governments and institutions worldwide, but none more so than the World Bank, its finance arm, the International Finance Corporation, and the IMF. A decade ago, these groups were widely criticised for their handling of the Asian financial crisis. That experience served as a lesson that prepared them for this latest examination. So how did they do? Chris Wright reports.
Turkey’s protracted negotiations with the IMF for a loan are looking increasingly fruitless, with some already convinced that the negotiations are as good as dead. The sovereign had shown little enthusiasm for a deal, which it argued it did not really need. But some are concerned that the situation leaves Turkey vulnerable if conditions take another turn for the worse. Solomon Teague reports.
Russian banks have turned a corner and are starting to look healthy again, after being among the hardest hit by the events of the last 12 months. Performance now far outstrips what is seen in neighbouring countries in Eastern Europe and the CIS, with strong government intervention credited with the strong turnaround. The traditional nature of their businesses, relative to their Western rivals, simplified the rescue process. William Rhode reports.
Brazil is home to legions of investors renowned for their conservatism. It is a country that has traditionally offered interest rates high enough to undermine the appeal of riskier assets that have flourished elsewhere. But now, with its interest rates and notorious inflation seemingly under control, investors are having to look elsewhere for returns. The country’s hedge funds believe they can meet this new demand. Jason Mitchell reports.
The increase in debt restructuring situations in the GCC will test the region’s insolvency regimes and institutions and lenders’ and borrowers’ ability to reach agreements. The surge of defaulting companies is unprecedented in the region and the untested legal landscape for restructurings is complicated by the shortage in experience of debt workouts. However, this situation is spurring momentum to modernise insolvency and creditor rights regimes. Furquan Kidwai reports.
Argentina's troubled relationship with the IMF looks to be on the mend. The Argentine government is once again heard to be negotiating for a reopening of its 2005 debt exchange for the remaining holdouts, amid vows to return to the international capital markets to ease short-term refinancing pressures. Markets have reacted well so far, but much depends on future policy shifts. Paul Kilby reports.
Africa has long fascinated specialist emerging market investors, but recently has started to open up to a broader spectrum of investors. But the continent remains off limits to many, due to the lack of clear and reliable information, illiquidity and fears over corruption. Globally, risk appetite is already low. Yet for precisely these reasons, those willing to take on the risk could unlock significant returns. Savita Iyer-Ahrestani reports.
In a bid to increase investment in new infrastructure projects and boost its economy without burdening taxpayers, Mexico has pioneered an innovative new security, allowing pension funds to make essentially private-equity investments while accounting for them as debt. Unlike anything seen elsewhere, it has similarities – but also significant differences – to the Canadian income trust. But where bankers dare to tread, will investors follow? Christopher Langner reports.
The financial cost of repairing the damage wrought by natural disasters can be crippling, especially for poorer nations, which are often the ones that bare the brunt of the devastation, and whose budgets are typically already overstretched. Yet insurance companies have traditionally focused far more on developed countries. Now, an increasing number are looking to capital markets solutions for emerging markets, though much work still needs to be done. Savita Iyer-Ahrestani reports.